Price more important than ethics

Affordability is now the key factor for grocery shoppers with ethical considerations least important, according to a report in the Guardian.

It’s something we’ve long found to be the case in dealing directly with potential customers.

There are customers who genuinely want food produced to different standards—organic, free-range and the like—to those of mainstream, intensive agribusinesses. They understand those standards entail less efficient means of production and are prepared to pay a price that reflects the higher costs of making what they see as an ethical choice.

However, those customers are a declining minority. The majority of potential customers fall into two main groups: those who want the cachet of more ethical standards but only if it comes at an intensive price and those who just want the cheapest food going.

Both groups are growing in size, as the Guardian reports.

Cash-strapped consumers are changing the way they shop to take advantage of cheap food deals.

It was the £1.99 Tesco chicken that, four years ago, came to symbolise cheap supermarket food and helped to galvanise consumers into questioning the provenance and economics of the staple items in their shopping basket.

In its new branch in Saxmundham – the Suffolk market town that even longer ago famously fought off plans for an out-of-town Tesco superstore – the £4 fresh chickens in the chiller cabinet are being ignored by the late afternoon shoppers who are favouring items covered in “reduced” stickers…

…a straw poll of customers at this store… reveals that shoppers of all ages and from all social backgrounds are more worried about price hikes than anything else when it comes to making their produce choices.

This mirrors findings from a recent government survey which showed that in May the main food issue of concern to 63% of respondents was food prices – an increase from 60% in November last year.

Even ethical considerations have dropped down their list of considerations, according to a separate survey by charity IGD ShopperVista which showed that price is crucial in determining product choice, with 41% of shoppers naming it as the most important factor and 90% listing it within their top five influences. Ethical provenance was considered least important – mirrored in the 3.7% slump in sales of organic food and drink last year.

via Food prices: ‘Bread, coffee and fresh fruit have become a bit of a luxury’ | Environment | The Guardian.

What the report doesn’t cover is whether consumers are so cash-strapped that they have to buy cheap food or if they’re simply unprepared to cut spending in other areas.

I looked up the Office for National Statistics figures for household spending in 2010. UK households spent an average of £474 a week in 2010, with food and non-alcoholic drinks coming fourth for spending after transport, housing, recreation and culture. Restaurants and hotels were fifth.

The other thing the report doesn’t mention is the relative effect of food prices versus incomes.

A household with high income spending 10% of that income on basic food and faced with a 100% rise in food prices can adjust its consumption to eat less expensive foods or reduce non-food expenditure. Even if it made no adjustment to food consumption, the largest cut required in non-food expenditure would be from 90% of household income to 80%. In other words, an 11% cut.

However, a household with low income spending 40% of that income on basic foods has much more limited options. They have to eat less food or make serious cuts to non-food expenditure. If the household makes no adjustment to food consumption, non-food expenditure would have to be cut from 60% of household income to 20%.

What’s telling about the value that British society places on food is not that low-income families are looking for the cheapest food but, if the Guardian report is to be believed, that more affluent families are too. In other words, they’d rather buy cheap food than cut spending elsewhere.

Personally, I’d rather have good food, from non-intensive sources that include the croft, at home than eat out, have the latest mobile phone, go to the pub or have a second car. But then, I am a little weird.

Then there’s the issue of food wastage—why buy food that’s only destined for the bin—but that’s something for another day.

9 Responses to “Price more important than ethics”

  1. People want ethically-raised happy animals that come to them in small, shrink wrapped packages and they’d like to be paid by the contented, healthy serfs who are fortunate enough to live in the countryside and harvest the free food. It’s that simple. cheers.

  2. If you’re weird Stoney, then so am I, and proud of it!

  3. I was surprised when some English friends came to visit us (we are in Canada) and went on and on about how expensive food was here. Relative to income, food here is not expensive and it is quite good quality. Our local supermarket sells a lot of local, organic food and all the fresh seafood is sustainable.

    We usually pay the premium for ethically raised pork, beef and chicken. I find it pretty economical when I buy a whole or half animal direct from the producer. Yes, it is more expensive but I feel much better about eating meat that comes from animals that had a good life and were humanely slaughtered and were raised by farmers that are good stewards of the land and are making a living from what they do. Oh, and I don’t have a bigscreen TV…saves a ton of money that can be spent on food!

    The other night I bought a couple of packs of supermarket chicken drumsticks….$4 for 8. Two of the the fib-tibias were broken before slaughter judging by the amount of blood and one drumstick had a huge bruise and blood pocket which made me become vegetarian at least for the evening:-( We have also had a huge recall of e-coli contaminated beef from a huge packing plant just to underline the risks of cheap factory produced food.

    Anyhow I found it disturbing that the only thing our friends cared about was the price especially since they could afford a holiday! I really wonder about the advertising and culture in Britain that makes the price so much more important than the quality of the food. The lack of awareness about the realities of farming and food security is worrying.

  4. I’m afraid Stoney that we will be beating our head off a stone wall on this matter.
    The reality of this consumer driven culture is that the cheapest food source is the model that the majority will follow. If a housewife has ‘x’ amount of money in her pocket, food to put on the table for her family then the decision for the cheapest is a no brainer in their book, the fact of poor animal husbandry/welfare will not even be a consideration, neither will be the quality of the food/meat. While this is sad it is reality and something that won’t change.
    Another issue is the cost of some of the “cheaper” foods, things like ready foods, breads, preserves, cereals and so forth….. none of those can be a “cheap” option. We constantly see people in our supermarkets with a trolly full of tosh and rubbish that costs a fortune, has poor nutritional value, and the thing is that most of the processed trash they are buying can be produced from scratch at home to a much superior standard for a lower cost. I think education of our young people in schools is needed in what used to be called “home economics”…. but that is just “old hat” nowadays… hence our rising obesity problem.
    Your home produced quality product will be aimed at a target market, probably more affluent market, a market prepared to accept the higher premium the goods attract and this in some ways defines the outlying problem. Like it or not there is a multi-tear society, a society where there is the have’s and the have-not’s, some people can afford to buy the premium product, the majority I am afraid cannot.

    • Actually, our pork isn’t a “premium product”. It isn’t priced at, or near, the top of the potential price range to customers who see themselves being defined as high status through their choice of product. We’re not producing the Rolls Royce of pork. Our pork is a different product to the intensively reared, massed produced pork sold via the supermarkets. It’s a more costly product as those differences cut out the “efficiencies” and compromises needed to deliver cheap pork. But that does not make it a premium product. We don’t charge a premium over and above the cost of production plus a small margin.

      Many of our regular customers are low to middle income earners, and they’re much less likely to complain about the price than the handful of customers who see themselves as being high status, particularly those who see themselves as having much higher status than us. One of the big differences between the low income customers and the high status, high earners is that the former are much less wasteful of product that is, for them, a serious investment in their diet. They use the entire pig and they use it sparingly across many meals. The high status, high earning customers usually reject the less desirable parts of the pig (offal, trotters, heads, etc). From what they say, they also tend to use the pork much more lavishly. A joint will be eaten in one meal, or perhaps two, where a low income customer will make the same size joint last across four or five meals.

      The more you eke out a more costly ingredient, the more cost effective it is. That’s also from home economics.

  5. This is a tough one. If it does come down to economics for a poor family, then at least they buy whole produce from a supplier that may not be local. But at least they are preparing healthy dishes. We do have to address the nutritional aspect and some people do have learn to diversify their meals to be more healthy balanced. I would agree with above commenter that the local produced stuff sometimes is bought/targeted to/by the affuent.

  6. Oooops. I guess I will never use the word premium again. Hah. Sorry . Apologies. The pork I buy costs more than the stuff at the supermarket hence premium. Ooops I said it again. Sorry.

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